Difference Between General Liability & Professional Liability
Finding the right kind of insurance to cover all aspects of your company is vital to protecting your assets and, in some ways, your reputation. There are at least two types of insurance that most businesses need: general liability and professional liability insurance. There are distinct differences in what each type of insurance covers and how they protect your business.
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General Liability Insurance
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General Liability is the most common form of liability insurance and it usually covers issues, injuries or damages related to accidents that occur on the business property. It also applies to injuries or accidents related to products the business sells or otherwise provides. Like all insurances, there are exclusions, rules and other requirements that must be carefully considered before purchasing a policy.
Professional Liability Insurance
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Medical malpractice insurance is a common form of professional liability insurance. Professional liability insurance protects the holder against claims that they failed to fulfill their professional obligations, thus resulting in a loss to the person filing the claim. Another reason for a claim would be alleged negligence on behalf of the policy holder. There are various forms of professional liability insurance, the most-commonly known being medical malpractice insurance.
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Comparing the Two
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General liability protects against actual injuries or physical damage, while professional liability is more about economic damages that are allegedly caused by a person's failure to complete a professional duty.
Product liability insurance
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Product liability insurance does not fall under either general or professional liability. Product liability insurance protects a company if a product that company makes becomes defective over time, causing injury or death to the consumer. This type of insurance is generally considered beneficial to manufacturers.
Hold Harmless Agreements
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Most businesses have their own insurance in place. If you contract with such a business, it is a good idea to develop a "hold harmless" or "indemnity" agreement which states that you are responsible for any loss you cause and the other business is likewise responsible for any loss it causes. This is a standard practice with regard to general liability insurance but is not applicable to professional liability insurance because the losses the indemnity agreement speak of are usually physical in nature.
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References
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